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Southland Company is preparing a cash budget for August. The company has $17,600 cash at the beginning of August and anticipates $122,000 in cash receipts and $135,100 in cash disbursements during August. Southland Company wants to maintain a minimum cash balance of $10,000. The preliminary cash balance at the end of August before any loan activity is:_____________. A. $27,600. B. ($13,100). C. $4,500. D. $14,500. E. $139,600.

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Answer:

C. $4,500

Explanation:

The total available cash of Southland Company in the month of August is $139,600 (Beginning balance $17,600 + $122,000 anticipated cash receipts) but we have to deduct cash disbursement in the amount of $135,100 the resulted to an ending balance of $4,500 before any loan activity to attain the maintaining balance required.

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